American Airlines reports third-quarter 2023 financial results

October 19, 2023

FORT WORTH, Texas, Oct. 19, 2023 (GLOBE NEWSWIRE) -- American Airlines Group Inc. (NASDAQ: AAL) today reported its third-quarter 2023 financial results, including:

  • Record third-quarter revenue of approximately $13.5 billion.
  • GAAP third-quarter net loss of $545 million, or ($0.83) per diluted share.
  • Excluding net special items1, third-quarter net income of $263 million, or $0.38 per diluted share.
  • Record third-quarter completion factor, best among U.S. network carriers.
  • Ended the third quarter with approximately $13.5 billion of total available liquidity.
  • Reduced total debt2 by $1.4 billion in the third quarter.
  • Credit rating upgraded by Fitch, Moody's and Standard & Poor's during the third quarter.

“The American Airlines team continues to produce strong results,” said American’s CEO Robert Isom. “Our team is delivering record-setting reliability and operational performance. We are executing on our plans and remain well-positioned for the future, supported by the strength of our network, our young and modern fleet, and our outstanding team.”

Reliability
American delivered a strong operation in the third quarter, including a record-setting performance during the peak travel period this summer. American operated more than 515,000 flights in the third quarter with an average load factor of 84%. The company produced its best-ever third-quarter completion factor and the best completion factor among U.S. network carriers. American is committed to building on this momentum and delivering a reliable operation for customers during the upcoming holiday travel season.

Financial performance
American produced record third-quarter revenues of approximately $13.5 billion, driven by a resilient demand environment and record-setting co-brand credit card and travel rewards program revenue. American saw year-over-year growth in corporate and government revenue in the third quarter and continued strength in demand and revenue from unmanaged business travel.

In the third quarter, the company produced an operating margin of (1.7%) and net loss of $545 million on a GAAP basis. Excluding net special items1, American produced an operating margin of 5.4% and net income of $263 million in the third quarter, exceeding the high end of the company’s prior guidance.

Liquidity and balance sheet
American reduced total debt2 by $1.4 billion in the third quarter. Strengthening the balance sheet continues to be a top priority, and the company is more than 70% of the way to its goal of reducing total debt by $15 billion by the end of 2025. As of Sept. 30, 2023, American had reduced its total debt by approximately $10.9 billion from peak levels in mid-2021.

American’s commitment to strengthening its balance sheet is being recognized, with Fitch, Moody's and Standard & Poor's each upgrading the company’s credit rating in the third quarter. The company ended the quarter with approximately $13.5 billion of total available liquidity, comprised of cash and short-term investments plus undrawn capacity under revolving and other short-term credit facilities.

Guidance and investor update
Based on demand trends and the current fuel price forecast and excluding the impact of special items3, the company expects its fourth-quarter 2023 adjusted operating margin to be 2% to 4%. American now expects its full-year 2023 adjusted operating margin to be approximately 7%.

For additional financial forecasting detail, please refer to the company’s investor update, furnished with this press release with the SEC on Form 8-K. This filing will also be available at aa.com/investorrelations.

Conference call and webcast details
The company will conduct a live audio webcast of its financial results conference call at 7:30 a.m. CT today. The call will be available to the public on a listen-only basis at aa.com/investorrelations. An archive of the webcast will be available on the website through Nov. 19.

Notes
See the accompanying notes in the financial tables section of this press release for further explanation, including a reconciliation of all GAAP to non-GAAP financial information, including the calculation of free cash flow.

  1. The company recognized $808 million of net special items in the third quarter after the effect of taxes, which principally included operating net special items of $983 million related to one-time charges resulting from the ratification of a new collective bargaining agreement with American’s mainline pilots, as well as nonoperating net special items of $101 million for charges associated with debt extinguishments and mark-to-market net unrealized losses on certain equity investments.
  2. All references to total debt include debt, finance leases, operating lease liabilities and pension obligations.
  3. The company is unable to reconcile certain forward-looking information to GAAP as the nature or amount of net special items cannot be determined at this time.

About American Airlines Group
To Care for People on Life’s Journey®. Shares of American Airlines Group Inc. trade on Nasdaq under the ticker symbol AAL and the company’s stock is included in the S&P 500. Learn more about what’s happening at American by visiting news.aa.com and connect with American @AmericanAir and at Facebook.com/AmericanAirlines.

Cautionary statement regarding forward-looking statements and information
Certain of the statements contained in this report should be considered forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “project,” “could,” “should,” “would,” “continue,” “seek,” “target,” “guidance,” “outlook,” “if current trends continue,” “optimistic,” “forecast” and other similar words. Such statements include, but are not limited to, statements about the company’s plans, objectives, expectations, intentions, estimates and strategies for the future, and other statements that are not historical facts. These forward-looking statements are based on the company’s current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements. These risks and uncertainties include, but are not limited to, those set forth herein as well as in the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 (especially in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 1A. Risk Factors), and other risks and uncertainties listed from time to time in the company’s other filings with the Securities and Exchange Commission. Additionally, there may be other factors of which the company is not currently aware that may affect matters discussed in the forward-looking statements and may also cause actual results to differ materially from those discussed. The company does not assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements other than as required by law. Any forward-looking statements speak only as of the date hereof or as of the dates indicated in the statement.


American Airlines Group Inc.
Condensed Consolidated Statements of Operations
(In millions, except share and per share amounts)
(Unaudited)
                         
    3 Months Ended September 30,   Percent Increase   9 Months Ended September 30,   Percent Increase
      2023       2022     (Decrease)     2023       2022     (Decrease)
                         
Operating revenues:                        
Passenger   $ 12,421     $ 12,396     0.2     $ 36,502     $ 32,438     12.5  
Cargo     193       279     (30.9 )     613       970     (36.8 )
Other     868       787     10.4       2,611       2,375     10.0  
Total operating revenues     13,482       13,462     0.1       39,726       35,783     11.0  
                         
Operating expenses:                        
Aircraft fuel and related taxes     3,209       3,847     (16.6 )     9,098       10,369     (12.3 )
Salaries, wages and benefits     3,974       3,384     17.4       10,891       9,773     11.4  
Regional expenses:                        
Regional operating expenses     1,089       1,093     (0.5 )     3,224       3,058     5.5  
Regional depreciation and amortization     79       81     (1.4 )     239       240     (0.5 )
Maintenance, materials and repairs     870       685     26.9       2,389       1,949     22.6  
Other rent and landing fees     745       710     5.0       2,214       2,081     6.4  
Aircraft rent     342       347     (1.4 )     1,031       1,045     (1.4 )
Selling expenses     430       495     (13.2 )     1,357       1,331     1.9  
Depreciation and amortization     487       491     (0.8 )     1,456       1,486     (2.0 )
Special items, net     949       37     nm   (1)   962       189     nm  
Other     1,531       1,362     12.5       4,487       4,037     11.1  
Total operating expenses     13,705       12,532     9.4       37,348       35,558     5.0  
                         
Operating income (loss)     (223 )     930     nm       2,378       225     nm  
                         
Nonoperating income (expense):                        
Interest income     168       70     nm       456       107     nm  
Interest expense, net     (537 )     (499 )   7.8       (1,626 )     (1,430 )   13.7  
Other income (expense), net     (98 )     157     nm       (119 )     274     nm  
Total nonoperating expense, net     (467 )     (272 )   71.9       (1,289 )     (1,049 )   22.8  
                         
Income (loss) before income taxes     (690 )     658     nm       1,089       (824 )   nm  
                             
Income tax provision (benefit)     (145 )     175     nm       286       (148 )   nm  
                             
Net income (loss)   $ (545 )   $ 483     nm     $ 803     $ (676 )   nm  
                         
                         
Earnings (loss) per common share:                        
Basic   $ (0.83 )   $ 0.74         $ 1.23     $ (1.04 )    
Diluted   $ (0.83 )   $ 0.69         $ 1.16     $ (1.04 )    
                         
Weighted average shares outstanding (in thousands):                        
Basic     654,119       650,586           653,241       650,145      
Diluted     654,119       715,985           719,956       650,145      
                         
                         
Note: Percent change may not recalculate due to rounding.                    
                         
(1) Not meaningful or greater than 100% change.                        


American Airlines Group Inc.
Consolidated Operating Statistics (1)
(Unaudited)
                         
    3 Months Ended September 30,   Increase   9 Months Ended September 30,   Increase
    2023   2022   (Decrease)   2023   2022   (Decrease)
                         
Revenue passenger miles (millions)   61,561   58,499   5.2 %    173,595   160,305   8.3 % 
Available seat miles (ASM) (millions)   73,285   68,567   6.9 %    207,950   194,264   7.0 % 
Passenger load factor (percent)   84.0   85.3   (1.3 )pts   83.5   82.5   1.0 pts 
Yield (cents)   20.18   21.19   (4.8 )%   21.03   20.23   3.9 % 
Passenger revenue per ASM (cents)   16.95   18.08   (6.3 )%   17.55   16.70   5.1 % 
Total revenue per ASM (cents)   18.40   19.63   (6.3 )%   19.10   18.42   3.7 % 
Cargo ton miles (millions)   490   478   2.5 %    1,339   1,514   (11.6 )%
Cargo yield per ton mile (cents)   39.31   58.30   (32.6 )%   45.78   64.07   (28.6 )%
                         
Fuel consumption (gallons in millions)   1,102   1,031   6.9 %    3,107   2,922   6.3 % 
Average aircraft fuel price including related taxes (dollars per gallon)   2.91   3.73   (22.0 )%   2.93   3.55   (17.5 )%
                         
Operating cost per ASM (cents)   18.70   18.28   2.3 %    17.96   18.30   (1.9 )%
Operating cost per ASM excluding net special items (cents)   17.40   18.22   (4.5 )%   17.49   18.21   (3.9 )%
Operating cost per ASM excluding net special items and fuel (cents)   13.02   12.61   3.3 %    13.12   12.87   1.9 % 
                         
Passenger enplanements (thousands)   54,608   52,564   3.9 %    157,125   148,353   5.9 % 
Departures (thousands):                        
Mainline   296   273   8.1 %    860   775   11.0 % 
Regional   223   228   (2.4 )%   633   702   (9.8 )%
Total   519   501   3.3 %    1,493   1,477   1.1 % 
Average stage length (miles):                        
Mainline   1,166   1,175   (0.7 )%   1,144   1,172   (2.4 )%
Regional   461   476   (3.1 )%   464   479   (3.2 )%
Total   864   857   0.8 %    856   842   1.6 % 
Aircraft at end of period:                        
Mainline (2)   950   908   4.6 %    950   908   4.6 % 
Regional (3)   549   553   (0.7 )%   549   553   (0.7 )%
Total   1,499   1,461   2.6 %    1,499   1,461   2.6 % 
Full-time equivalent employees at end of period:                        
Mainline   104,300   102,200   2.1 %    104,300   102,200   2.1 % 
Regional (4)   28,500   27,500   3.6 %    28,500   27,500   3.6 % 
Total   132,800   129,700   2.4 %    132,800   129,700   2.4 % 
                         
                         
Note: Amounts may not recalculate due to rounding.                        
                         
(1) Unless otherwise noted, operating statistics include mainline and regional operations. Regional includes wholly-owned regional airline subsidiaries and operating results from capacity purchase carriers.
(2) Excludes one Boeing 737-800 mainline aircraft that was in temporary storage as of September 30, 2023.
(3) Includes aircraft owned and leased by American as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excluded from the aircraft count above are 75 regional aircraft that were in temporary storage as of September 30, 2023 as follows: 54 Embraer 145, 11 Bombardier CRJ 700, five Embraer 170, and five Bombardier CRJ 900.
(4) Regional full-time equivalent employees only include our wholly-owned regional airline subsidiaries.
                         


American Airlines Group Inc.
Consolidated Revenue Statistics by Region
(Unaudited)
                           
      3 Months Ended September 30,   Increase   9 Months Ended September 30,   Increase
      2023   2022   (Decrease)   2023   2022   (Decrease)
                           
Domestic (1)                        
Revenue passenger miles (millions)   40,255   39,226   2.6 %    115,764   111,346   4.0 % 
Available seat miles (ASM) (millions)   48,146   45,686   5.4 %    138,400   131,507   5.2 % 
Passenger load factor (percent)   83.6   85.9   (2.3 )pts   83.6   84.7   (1.1 )pts
Passenger revenue (dollars in millions)   8,616   8,786   (1.9 )%   25,848   23,966   7.9 % 
Yield (cents)   21.40   22.40   (4.4 )%   22.33   21.52   3.7 % 
Passenger revenue per ASM (cents)   17.90   19.23   (6.9 )%   18.68   18.22   2.5 % 
                           
Latin America (2)                        
Revenue passenger miles (millions)   7,833   8,012   (2.2 )%   24,767   24,088   2.8 % 
Available seat miles (millions)   8,872   9,166   (3.2 )%   28,582   29,278   (2.4 )%
Passenger load factor (percent)   88.3   87.4   0.9 pts    86.7   82.3   4.4 pts 
Passenger revenue (dollars in millions)   1,490   1,596   (6.6 )%   5,045   4,357   15.8 % 
Yield (cents)   19.02   19.92   (4.5 )%   20.37   18.09   12.6 % 
Passenger revenue per ASM (cents)   16.80   17.41   (3.5 )%   17.65   14.88   18.6 % 
                           
Atlantic                          
Revenue passenger miles (millions)   11,764   10,623   10.7 %    28,274   23,273   21.5 % 
Available seat miles (millions)   14,262   12,945   10.2 %    35,328   30,955   14.1 % 
Passenger load factor (percent)   82.5   82.1   0.4 pts    80.0   75.2   4.8 pts 
Passenger revenue (dollars in millions)   2,056   1,901   8.2 %    4,875   3,848   26.7 % 
Yield (cents)   17.48   17.89   (2.3 )%   17.24   16.53   4.3 % 
Passenger revenue per ASM (cents)   14.41   14.68   (1.8 )%   13.80   12.43   11.0 % 
                           
Pacific                          
Revenue passenger miles (millions)   1,709   638   nm     4,790   1,598   nm  
Available seat miles (millions)   2,005   770   nm     5,640   2,524   nm  
Passenger load factor (percent)   85.2   82.9   2.3 pts    84.9   63.3   21.6 pts 
Passenger revenue (dollars in millions)   259   113   nm     734   267   nm  
Yield (cents)   15.16   17.74   (14.5 )%   15.32   16.66   (8.1 )%
Passenger revenue per ASM (cents)   12.92   14.71   (12.1 )%   13.01   10.55   23.3 % 
                           
Total International                        
Revenue passenger miles (millions)   21,306   19,273   10.5 %    57,831   48,959   18.1 %
Available seat miles (millions)   25,139   22,881   9.9 %    69,550   62,757   10.8 % 
Passenger load factor (percent)   84.7   84.2   0.5 pts    83.2   78.0   5.2 pts 
Passenger revenue (dollars in millions)   3,805   3,610   5.4 %    10,654   8,472   25.8 % 
Yield (cents)   17.86   18.73   (4.7 )%   18.42   17.30   6.5 % 
Passenger revenue per ASM (cents)   15.14   15.78   (4.1 )%   15.32   13.50   13.5 % 
                           
Note: Amounts may not recalculate due to rounding.                    
                           
(1) Domestic results include Canada, Puerto Rico and U.S. Virgin Islands.            
(2) Latin America results include the Caribbean.                    
                           



Reconciliation of GAAP Financial Information to Non-GAAP Financial Information                      
                             
American Airlines Group Inc. (the Company) sometimes uses financial measures that are derived from the condensed consolidated financial statements but that are not presented in accordance with GAAP to understand and evaluate its current operating performance and to allow for period-to-period comparisons. The Company believes these non-GAAP financial measures may also provide useful information to investors and others. These non-GAAP measures may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP. The Company is providing a reconciliation of reported non-GAAP financial measures to their comparable financial measures on a GAAP basis. The tables below present the reconciliations of the following GAAP measures to their non-GAAP measures: - Operating Income (Loss) (GAAP measure) to Operating Income Excluding Net Special Items (non-GAAP measure) - Operating Margin (GAAP measure) to Operating Margin Excluding Net Special Items (non-GAAP measure) - Pre-Tax Income (Loss) (GAAP measure) to Pre-Tax Income (Loss) Excluding Net Special Items (non-GAAP measure) - Pre-Tax Margin (GAAP measure) to Pre-Tax Margin Excluding Net Special Items (non-GAAP measure) - Net Income (Loss) (GAAP measure) to Net Income (Loss) Excluding Net Special Items (non-GAAP measure) - Basic and Diluted Earnings (Loss) Per Share (GAAP measure) to Basic and Diluted Earnings (Loss) Per Share Excluding Net Special Items (non-GAAP measure) Management uses these non-GAAP financial measures to evaluate the Company's current operating performance and to allow for period-to-period comparisons. As net special items may vary from period-to-period in nature and amount, the adjustment to exclude net special items allows management an additional tool to understand the Company’s core operating performance. Additionally, the tables below present the reconciliations of total operating costs (GAAP measure) to total operating costs excluding net special items and fuel (non-GAAP measure) and total operating costs per ASM (CASM) to CASM excluding net special items and fuel. Management uses total operating costs excluding net special items and fuel and CASM excluding net special items and fuel to evaluate the Company's current operating performance and for period-to-period comparisons. The price of fuel, over which the Company has no control, impacts the comparability of period-to-period financial performance. The adjustment to exclude fuel and net special items allows management an additional tool to understand and analyze the Company’s non-fuel costs and core operating performance.  
                             
  Reconciliation of Operating Income Excluding Net Special Items   3 Months Ended September 30,   Percent Increase   9 Months Ended September 30, Percent Increase  
      2023       2022     (Decrease)     2023       2022     (Decrease)  
      (in millions)       (in millions)      
                             
  Operating income (loss) as reported   $ (223 )   $ 930         $ 2,378     $ 225        
  Operating net special items:                          
  Mainline operating special items, net (1)     949       37           962       189        
     Regional operating special items, net     2       2           8       2        
  Operating income excluding net special items   $ 728     $ 969     (24.9 %)   $ 3,348     $ 416     nm  
                             
  Calculation of Operating Margin                          
                             
  Operating income (loss) as reported   $ (223 )   $ 930         $ 2,378     $ 225        
                             
  Total operating revenues as reported   $ 13,482     $ 13,462         $ 39,726     $ 35,783        
                             
  Operating margin     (1.7 %)     6.9 %         6.0 %     0.6 %      
                             
  Calculation of Operating Margin Excluding Net Special Items                          
                             
  Operating income excluding net special items   $ 728     $ 969         $ 3,348     $ 416        
                             
  Total operating revenues as reported   $ 13,482     $ 13,462         $ 39,726     $ 35,783        
                             
  Operating margin excluding net special items     5.4 %     7.2 %         8.4 %     1.2 %      
                             
  Reconciliation of Pre-Tax Income (Loss) Excluding Net Special Items                          
                             
  Pre-tax income (loss) as reported   $ (690 )   $ 658         $ 1,089     $ (824 )      
  Pre-tax net special items:                          
  Mainline operating special items, net (1)     949       37           962       189        
     Regional operating special items, net     2       2           8       2        
  Nonoperating special items, net (2)     101       (57 )         146       34        
  Total pre-tax net special items     1,052       (18 )         1,116       225        
                             
  Pre-tax income (loss) excluding net special items   $ 362     $ 640     (43.4 %)   $ 2,205     $ (599 )   nm  
                             
  Calculation of Pre-Tax Margin                          
                             
  Pre-tax income (loss) as reported   $ (690 )   $ 658         $ 1,089     $ (824 )      
                             
  Total operating revenues as reported   $ 13,482     $ 13,462         $ 39,726     $ 35,783        
                             
  Pre-tax margin     (5.1 %)     4.9 %         2.7 %     (2.3 %)      
                             
  Calculation of Pre-Tax Margin Excluding Net Special Items                          
                             
  Pre-tax income (loss) excluding net special items   $ 362     $ 640         $ 2,205     $ (599 )      
                             
  Total operating revenues as reported   $ 13,482     $ 13,462         $ 39,726     $ 35,783        
                             
  Pre-tax margin excluding net special items     2.7 %     4.8 %         5.6 %     (1.7 %)      
                             
                             
      3 Months Ended September 30,   Percent Increase   9 Months Ended September 30, Percent Increase  
  Reconciliation of Net Income (Loss) Excluding Net Special Items     2023       2022     (Decrease)     2023       2022     (Decrease)  
      (in millions, except share and per share amounts)       (in millions, except share and per share amounts)      
                             
  Net income (loss) as reported   $ (545 )   $ 483         $ 803     $ (676 )      
  Net special items:                          
  Total pre-tax net special items (1), (2)     1,052       (18 )         1,116       225        
     Income tax special items, net     -       -           -       (9 )      
     Net tax effect of net special items     (244 )     13           (252 )     (39 )      
  Net income (loss) excluding net special items   $ 263     $ 478     (45.0 %)   $ 1,667     $ (499 )   nm  
                             
  Reconciliation of Basic and Diluted Earnings (Loss) Per Share Excluding Net Special Items                          
                             
  Net income (loss) excluding net special items   $ 263     $ 478         $ 1,667     $ (499 )      
                             
  Shares used for computation (in thousands):                          
  Basic     654,119       650,586           653,241       650,145        
  Diluted     722,087       715,985           719,956       650,145        
                             
  Earnings (loss) per share excluding net special items:                          
  Basic   $ 0.40     $ 0.73         $ 2.55     $ (0.77 )      
  Diluted (3)   $ 0.38     $ 0.69         $ 2.36     $ (0.77 )      
                             
  Reconciliation of Total Operating Costs per ASM Excluding Net Special Items and Fuel                          
                             
  Total operating expenses as reported   $ 13,705     $ 12,532         $ 37,348     $ 35,558        
                             
  Operating net special items:                          
  Mainline operating special items, net (1)     (949 )     (37 )         (962 )     (189 )      
     Regional operating special items, net     (2 )     (2 )         (8 )     (2 )      
  Total operating expenses excluding net special items     12,754       12,493           36,378       35,367        
                             
  Aircraft fuel and related taxes     (3,209 )     (3,847 )         (9,098 )     (10,369 )      
  Total operating expenses excluding net special items and fuel   $ 9,545     $ 8,646         $ 27,280     $ 24,998        
                             
      (in cents)       (in cents)    
                             
  Total operating expenses per ASM as reported     18.70       18.28           17.96       18.30        
                             
  Operating net special items per ASM:                          
  Mainline operating special items, net (1)     (1.29 )     (0.05 )         (0.46 )     (0.10 )      
     Regional operating special items, net     -       -           -       -        
  Total operating expenses per ASM excluding net special items     17.40       18.22           17.49       18.21        
                             
  Aircraft fuel and related taxes per ASM     (4.38 )     (5.61 )         (4.38 )     (5.34 )      
  Total operating expenses per ASM excluding net special items and fuel     13.02       12.61           13.12       12.87        
                             
  Note: Amounts may not recalculate due to rounding.                          
                             
  FOOTNOTES:                          
                             
(1) The 2023 three and nine month period mainline operating special items, net principally included $983 million of one-time charges resulting from the ratification of a new collective bargaining agreement with our mainline pilots, including a one-time payment of $754 million as well as adjustments to other benefit-related items of $229 million. The 2022 nine month period mainline operating special items, net principally included a non-cash impairment charge to write down the carrying value of the Company's retired Airbus A330 fleet to the estimated fair value due to the market conditions for certain used aircraft. The Company retired its Airbus A330 fleet in 2020 as a result of the decline in demand for air travel due to the COVID-19 pandemic.  
                             
(2) Principally included charges associated with debt refinancings and extinguishments as well as mark-to-market net unrealized gains and losses associated with certain equity investments.  
                             
(3) The 2023 three and nine month period diluted earnings per share excluding net special items gives effect to, among other things, the Company's outstanding 6.5% senior convertible notes by (a) adding back to earnings $11 million and $33 million of interest expense, respectively, related to such convertible notes, net of estimated profit sharing, short-term incentive and tax effects and (b) including in the diluted shares outstanding, 61.7 million shares issuable in respect to such convertible notes.  
                             


American Airlines Group Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)(Unaudited)
             
        9 Months Ended September 30,
          2023       2022  
             
  Net cash provided by operating activities $ 5,154     $ 2,331  
  Cash flows from investing activities:      
  Capital expenditures and aircraft purchase deposits   (1,753 )     (1,860 )
  Proceeds from sale-leaseback transactions and sale of property and equipement   219       83  
  Purchases of short-term investments   (8,323 ) (11,257 )   (12,113 )
  Sales of short-term investments   6,857   13,923     13,412  
  Decrease in restricted short-term investments   39       41  
  Purchase of equity investments   -       (205 )
  Other investing activities   300       (274 )
  Net cash used in investing activities   (2,661 )     (916 )
  Cash flows from financing activities:      
  Payments on long-term debt and finance leases   (4,624 )     (2,038 )
  Proceeds from issuance of long-term debt   2,324       699  
  Other financing activities   (92 )     (8 )
  Net cash used in financing activities   (2,392 )     (1,347 )
  Net increase in cash and restricted cash   101       68  
  Cash and restricted cash at beginning of period   586       408  
(1) Cash and restricted cash at end of period $ 687     $ 476  
             
             
             
(1) The following table provides a reconciliation of cash and restricted cash to amounts reported within the condensed consolidated balance sheets:
             
  Cash   $ 577     $ 332  
  Restricted cash included in restricted cash and short-term investments   110       144  
  Total cash and restricted cash $ 687     $ 476  
             


Free Cash Flow  
             
The Company's free cash flow summary is presented in the table below, which is a non-GAAP measure that management believes is useful information to investors and others in evaluating the Company's ability to generate cash from its core operating performance that is available for use to reinvest in the business or to reduce debt. The Company defines free cash flows as net cash provided by operating activities less net cash used in investing activities, adjusted for (1) net purchases of short-term investments and (2) change in restricted cash. We believe that calculating free cash flow as adjusted for these items is more useful for investors because short-term investment activity and restricted cash are not representative of activity core to our operations. This non-GAAP measure may not be comparable to similarly titled non-GAAP measures of other companies, and should be considered in addition to, and not as a substitute for or superior to, any measure of performance, cash flow or liquidity prepared in accordance with GAAP. Our calculation of free cash flow is not intended, and should not be used, to measure the residual cash flow available for discretionary expenditures because, among other things, it excludes mandatory debt service requirements and certain other non-discretionary expenditures.    
             
        9 Months Ended September 30, 2023    
           
        (in millions)    
             
  Net cash provided by operating activities $ 5,154      
  Adjusted net cash used in investing activities (1)   (1,159 )    
  Free cash flow $ 3,995      
             
             
             
(1) The following table provides a reconciliation of adjusted net cash used in investing activities for the nine months ended September 30, 2023 (in millions):    
             
  Net cash used in investing activities $ (2,661 )    
  Adjustments:      
  Net purchases of short-term investments   1,466      
  Decrease in restricted cash   36      
  Adjusted net cash used in investing activities $ (1,159 )    
             



       
American Airlines Group Inc. 
Condensed Consolidated Balance Sheets
(In millions, except shares)
 
       
  September 30, 2023   December 31, 2022
  (unaudited)    
Assets      
       
Current assets      
Cash $ 577     $ 440  
Short-term investments   10,005       8,525  
Restricted cash and short-term investments   925       995  
Accounts receivable, net   2,021       2,138  
Aircraft fuel, spare parts and supplies, net   2,461       2,279  
Prepaid expenses and other   719       892  
Total current assets   16,708       15,269  
       
Operating property and equipment      
Flight equipment   40,934       39,703  
Ground property and equipment   10,156       9,913  
Equipment purchase deposits   799       613  
Total property and equipment, at cost   51,889       50,229  
Less accumulated depreciation and amortization   (21,571 )     (20,029 )
Total property and equipment, net   30,318       30,200  
       
Operating lease right-of-use assets   7,878       8,094  
       
Other assets      
Goodwill   4,091       4,091  
Intangibles, net   2,053       2,059  
Deferred tax asset   2,875       3,099  
Other assets   1,788       1,904  
Total other assets   10,807       11,153  
       
Total assets $ 65,711     $ 64,716  
       
Liabilities and Stockholders’ Equity (Deficit)      
       
Current liabilities      
Current maturities of long-term debt and finance leases $ 3,767     $ 3,274  
Accounts payable   2,123       2,149  
Accrued salaries and wages   3,262       1,713  
Air traffic liability   7,673       6,745  
Loyalty program liability   3,491       3,169  
Operating lease liabilities   1,387       1,465  
Other accrued liabilities   2,677       2,981  
Total current liabilities   24,380       21,496  
       
Noncurrent liabilities      
Long-term debt and finance leases, net of current maturities   29,722       32,389  
Pension and postretirement benefits   2,929       2,837  
Loyalty program liability   5,834       5,976  
Operating lease liabilities   6,329       6,559  
Other liabilities   1,653       1,258  
Total noncurrent liabilities   46,467       49,019  
       
Stockholders' equity (deficit)      
Common stock, 653,504,063 shares outstanding at September 30, 2023   7       6  
Additional paid-in capital   7,353       7,291  
Accumulated other comprehensive loss   (4,788 )     (4,585 )
Retained deficit   (7,708 )     (8,511 )
Total stockholders' deficit   (5,136 )     (5,799 )
       
Total liabilities and stockholders’ equity (deficit) $ 65,711     $ 64,716  
       

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Source: American Airlines, Inc.